Recent news suggests that China has begun to sell off US bonds at lightning speed, while the US also posted its largest monthly budget deficit in history in November. According to reports, China's total U.S. debt has reached $160 billion, while the U.S. monthly deficit has reached $314 billion, up 26% from the same period last year. This series of moves shows that the US economy is facing serious difficulties.
The article mentions that the rhythm of the nightmare in the United States has begun, because not only China has begun to take on US debt, but also some other countries such as Japan, the United Kingdom, Canada, Switzerland, Norway, etc. China now holds $700 billion in U.S. debt, up $160 billion from more than $860 billion previously.
The article also mentions the problem of the US fiscal deficit. America's economic problems are not due to a lack of money, but to the fact that expenses are too high and expenses far exceed income. The United States is actually the richest man in the world, but it spends too much, resulting in more and more debts that are difficult to pay off. In order to settle the principal and interest of the debt that is about to mature, the United States can only continue to borrow more money and pay off the old debt with new debt. However, the problem now for the United States is that they can no longer sell new bonds, and even the existing bonds have been sold. Many countries have realized the risks and pitfalls of the U.S. Treasury bonds, and have responded to China's ** actions, exacerbating the U.S. debt crisis.
China's sell-off of U.S. bonds has had a "domino effect", along with the United States' staunch allies Britain, Canada, Japan and South Korea. These countries are aware of the risks of US Treasuries and have decided to reduce their holdings of US Treasuries. This has further exacerbated the U.S. fiscal deficit and debt crisis.
In order to make up for the debt crisis and fiscal deficit, the United States** can only continue to issue Treasury bonds. However, the problem now is that the United States can no longer sell these bonds. Investors' panic over U.S. Treasuries has led to a flow of funds, resulting in a rapid rally. But this is only a temporary appearance, and the structural problems of the United States have not been substantively resolved.
Faced with the debt crisis and fiscal deficit, the United States** has been unable to find an effective solution. The article points out that under Biden's leadership, the future of the United States is worrying. The United States, already mired in debt, could eventually collapse and lose its hegemony.
However, the collapse of the US economy is also not a good thing for the world. Therefore, China should be prudent and cautious in its actions. At this time, China should strengthen cooperation with other countries to jointly address global economic risks and promote win-win and sustainable development.
The U.S. fiscal deficit and debt crisis are not only internal problems in the United States, but also pose greater risks and impacts to the global economy. As an important player in the global economy, China needs to maintain a high degree of attention and vigilance against the trend of the US economy and the debt crisis. In the process of responding to this challenge, China can jointly address global economic risks and contribute to economic recovery and sustainable development through US debt and strengthening cooperation with other countries.
Finally, we need to realize that the global economy is an interdependent system, and countries need to strengthen cooperation and coordination to address challenges together. It is only through cooperation that we can achieve mutual development and prosperity.